Smith Inc. makes luxury indoor shoes in one style, but in Regular and Deluxe. The Regular shoes have cloth soles, and the Deluxe shoes have cloth-covered natural rubber soles. Smith Inc. is preparing its budget for June 2023 and has estimated sales based on past experience. Information for the month of June is as follows: Smith Inc. accounts for direct materials using a FIFO cost-flow assumption. Smith Inc. uses a FIFO cost-flow assumption for finished-goods inventory. All the shoes are made in batches of 50 pairs of shoes. Smith Inc. incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Smith Inc. ships 40 pairs of shoes per shipment. Smith Inc. uses activity-based costing and has classified all overhead costs for the month of June as shown in the following chart: Additional information: a. All sales are on account; 63% are collected in the month of the sale, 35% are collected the following month, and 2% are never collected and written off as bad debts. b. All purchases of materials are on account. Smith Inc. pays for 60% of purchases in the month of purchase and 40% in the following month. c. All other costs are paid in the month incurred, including the declaration and payment of a $20,000 cash dividend in June. d. Smith Inc. is making monthly interest payments of 0.5% ( 6% per year) on a $150,000 long-term loan. e. Smith Inc. plans to pay the $12,211 of taxes owed as of May 31 in the month of June. Income tax expense for June is zero. f. 26% of processing, setup, and inspection costs and 18% of marketing and general administration and shipping costs are depreciation. Requirements: (Do not round intermediate calculations. Round all final answers to the nearest whole number utilizing the spreadsheet template provided.) 1. Prepare each of the following for June: a. Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget in both units and dollars; round to nearest cent. d. Direct manufacturing labor cost budget e. Manufacturing overhead cost budgets for setup, processing, and inspection activities f. Budgeted unit cost of ending finished-goods inventory and ending inventories budget. g. Cost of goods sold budget. h. Marketing and general administration and shipping costs budget 2. Use the provided balance sheet and the other information provided in the previous pages to prepare a cash budget for Smith Inc. for June. 3. Prepare a budgeted income statement for June and a budgeted balance sheet for Smith Inc. as of June 30,2023. Use formulas only in this tab-see notes tab for more explanations Example - if you need to multiply 45 by the sales, type = then click on the cell on the inputs tab that has "45". Do not type "45" while you are in the Operating Budgets or IS and BS tab. la. Revenues Budget For the Month of June, 2023 \begin{tabular}{lccc} & Units & Selling Price & Total Revenues \\ \hline Regular & & & \\ Deluxe & & \\ Total & & \\ \hline \end{tabular} b. Production Budget For the Month of June, 2023 c. Direct Material Usage Budget in Quantity and Dollars For the Month of June, 2023 Material \begin{tabular}{llll} & Cloth & Rubber & Total \\ \hline \end{tabular} Physical Units Budget Direct materials required for Regular Deluxe Total quantity of direct materials to be used Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) To be purchased this period: Cloth: Rubber: Direct materials to be used this period Direct Materials Purchases Budget For the Month of June, 2023 Direct Manufacturing Labor Costs Budget For the Month of June, 2023 Output Units Direct Manufacturing Produced Labor-Hours per Unit ad Costs Budget June 2023 Total Unit Costs of Ending Finished Goods Inventory Ending Inventories Budget June, 2023 Quantity Cost per unit Total Direct Materials Cloth Rubber Finished goods Regular Deluxe Total ending inventory g. Cost of Goods Sold Budget For the Month of June, 2023 Beginning finished goods inventory, June 1 Direct materials used (requirement c) Direct manufacturing labor (requirement d) Manufacturing overhead (requirement e) Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, June 30 (from requirement f ) Cost of goods sold Nonmanufacturing Costs Budget For the Month of June, 2023 Total Marketing and general administration Shipping Total 2 Cash Budget June 30,2023 Cash balance, June 1 (from Balance Sheet) Add receipts: Collections from May accounts receivable Collections from June accounts receivable Total collection from customers Total cash available for needs Deduct cash disbursements Direct material purchases in May Direct material purchases in June Direct manufacturing labor Manufacturing overhead Nonmanufacturing costs Taxes Dividends Total disbursements Financing: Interest Ending cash balance, June 30 Use formulas only in this tab 3 Budgeted Income Statement For the Month of June, 2023 Revenues Bad debt expense Net revenues Cost of goods sold Gross margin Operating (nonmanufacturing) costs Interest expense (for June) Net income Budgeted Balance Sheet June 30,2023 Assets Cash Accounts receivable Less: allowance for doubtful accounts Inventories Direct materials Finished goods Fixed assets Less: accumulated depreciation Total assets Liabilities and Equity Accounts payable Interest payable Long-term debt Common stock Retained earnings Total liabilities and equity Smith Inc. makes luxury indoor shoes in one style, but in Regular and Deluxe. The Regular shoes have cloth soles, and the Deluxe shoes have cloth-covered natural rubber soles. Smith Inc. is preparing its budget for June 2023 and has estimated sales based on past experience. Information for the month of June is as follows: Smith Inc. accounts for direct materials using a FIFO cost-flow assumption. Smith Inc. uses a FIFO cost-flow assumption for finished-goods inventory. All the shoes are made in batches of 50 pairs of shoes. Smith Inc. incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Smith Inc. ships 40 pairs of shoes per shipment. Smith Inc. uses activity-based costing and has classified all overhead costs for the month of June as shown in the following chart: Additional information: a. All sales are on account; 63% are collected in the month of the sale, 35% are collected the following month, and 2% are never collected and written off as bad debts. b. All purchases of materials are on account. Smith Inc. pays for 60% of purchases in the month of purchase and 40% in the following month. c. All other costs are paid in the month incurred, including the declaration and payment of a $20,000 cash dividend in June. d. Smith Inc. is making monthly interest payments of 0.5% ( 6% per year) on a $150,000 long-term loan. e. Smith Inc. plans to pay the $12,211 of taxes owed as of May 31 in the month of June. Income tax expense for June is zero. f. 26% of processing, setup, and inspection costs and 18% of marketing and general administration and shipping costs are depreciation. Requirements: (Do not round intermediate calculations. Round all final answers to the nearest whole number utilizing the spreadsheet template provided.) 1. Prepare each of the following for June: a. Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget in both units and dollars; round to nearest cent. d. Direct manufacturing labor cost budget e. Manufacturing overhead cost budgets for setup, processing, and inspection activities f. Budgeted unit cost of ending finished-goods inventory and ending inventories budget. g. Cost of goods sold budget. h. Marketing and general administration and shipping costs budget 2. Use the provided balance sheet and the other information provided in the previous pages to prepare a cash budget for Smith Inc. for June. 3. Prepare a budgeted income statement for June and a budgeted balance sheet for Smith Inc. as of June 30,2023. Use formulas only in this tab-see notes tab for more explanations Example - if you need to multiply 45 by the sales, type = then click on the cell on the inputs tab that has "45". Do not type "45" while you are in the Operating Budgets or IS and BS tab. la. Revenues Budget For the Month of June, 2023 \begin{tabular}{lccc} & Units & Selling Price & Total Revenues \\ \hline Regular & & & \\ Deluxe & & \\ Total & & \\ \hline \end{tabular} b. Production Budget For the Month of June, 2023 c. Direct Material Usage Budget in Quantity and Dollars For the Month of June, 2023 Material \begin{tabular}{llll} & Cloth & Rubber & Total \\ \hline \end{tabular} Physical Units Budget Direct materials required for Regular Deluxe Total quantity of direct materials to be used Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) To be purchased this period: Cloth: Rubber: Direct materials to be used this period Direct Materials Purchases Budget For the Month of June, 2023 Direct Manufacturing Labor Costs Budget For the Month of June, 2023 Output Units Direct Manufacturing Produced Labor-Hours per Unit ad Costs Budget June 2023 Total Unit Costs of Ending Finished Goods Inventory Ending Inventories Budget June, 2023 Quantity Cost per unit Total Direct Materials Cloth Rubber Finished goods Regular Deluxe Total ending inventory g. Cost of Goods Sold Budget For the Month of June, 2023 Beginning finished goods inventory, June 1 Direct materials used (requirement c) Direct manufacturing labor (requirement d) Manufacturing overhead (requirement e) Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, June 30 (from requirement f ) Cost of goods sold Nonmanufacturing Costs Budget For the Month of June, 2023 Total Marketing and general administration Shipping Total 2 Cash Budget June 30,2023 Cash balance, June 1 (from Balance Sheet) Add receipts: Collections from May accounts receivable Collections from June accounts receivable Total collection from customers Total cash available for needs Deduct cash disbursements Direct material purchases in May Direct material purchases in June Direct manufacturing labor Manufacturing overhead Nonmanufacturing costs Taxes Dividends Total disbursements Financing: Interest Ending cash balance, June 30 Use formulas only in this tab 3 Budgeted Income Statement For the Month of June, 2023 Revenues Bad debt expense Net revenues Cost of goods sold Gross margin Operating (nonmanufacturing) costs Interest expense (for June) Net income Budgeted Balance Sheet June 30,2023 Assets Cash Accounts receivable Less: allowance for doubtful accounts Inventories Direct materials Finished goods Fixed assets Less: accumulated depreciation Total assets Liabilities and Equity Accounts payable Interest payable Long-term debt Common stock Retained earnings Total liabilities and equity